Pros and cons of a cooperative business

[u/Greedy_Yak_3763]

what are the pros and cons of a restaurant owned by a cooperative, and if there’s any cons, how will i come up with a solution. Thanks

[u/jehb]

The (joint consumer/worker owned) grocery cooperative I used to work for operated an independent restaurant.

Not necessarily a pro or a con, but one thing to note: The average customer did not know the business was a cooperative. This was in contrast to the grocery stores, which while having many customers just popping in for drinks and snacks or a meal from the hot bar or salad bar, the major of sales were to cooperative owners. They knew the business model and were invested in it.

The biggest pro/con was also its downfall. The restaurant paid a living wage and covered health care, something that very few other restaurants in town did, making it difficult to keep costs in line with profits. Eventually, it folded, after quite some time of being a financial drain on the rest of the co-op.

There's no doubt that the improved compensation was a great thing for employees, and in my biased opinion, it was a really great restaurant, but the margins in the restaurant industry are so razor thin that there was little room for financial instability. In theory, they could have reduced employee benefits, but putting the restaurant employees under a different system than the employees of the rest of the co-op would have been tremendously unfair and unpopular.

[u/Typical-Arm-2667]

That is a fair question.

Much will depend on the structure of daily operations , strategic decision making methods, the devolution (sic) of initiative and so on and on ...

All of that will depend on the organisations objectives (mission: feed as many people as possible or just a few at high markup ...) , the local legal requirements, the cultural outlook of the coop itself.

I guess your more than aware of these.

Are there any Templates out there in the r/cooperatives collective knowledge?

Or even a How To ?

Then an analysis or a "pre Mortem" can start :)

[edit s/their/there/]

[u/DeviantHistorian]

So the food co-op in Iowa has a place you can sit and eat at and microwaves to heat up food and do things like that. And the staff is Union and I think it's more sustainable. That way they don't have staff that wait on people and do all that. I feel like wait staff is not very cooperative. It's more of a hierarchical structure and I've never really seen much of a cooperative restaurant. I've seen some like co-op cafes like the New deal Cafe, but that's so much with restaurants and restaurants have a high fail rate anyhow, so you'll be interesting to see how this would pan out.

[u/coopnewsguy]

There are a lot of worker co-op restaurants. There's nothing inherent in the food service industry that makes the model particularly difficult. If you are talking about some other type of co-op owning a restaurant, then you'll want to start off with the idea that your workers are going to join UFCW or some other appropriate union. If it's worker owned, check out the Arizmendi Bakeries and Casa Nueva for good examples of long-functioning co-ops. If it's the latter variety, I'd need to know what kind of co-op is owning the restaurant to give you an example (but do know that you will want and need a unionized work force - it will save you a lot of headache down the road).